How much does payroll software cost? A number of factors affect the way payroll software are priced. Different vendors have different pricing models but may share some things in common. Some collect fees based on the number of users while others do it according to the volume of invoices or quotes. However, the pricing of payroll software, in general, comes in several types of plans which include:
- Free Application
- Monthly subscription
- Per-user pricing
- Quote-based pricing
- One-Time Licensing
- Software bundle
In this article, we will seek to determine how much does payroll software cost by comparing the different pricing models currently in the market. The advantages and disadvantages of these payment plans will be discussed in detail with examples of each provided. This is for you to be able weigh the best pricing option for your organization, as pricing is one of the major purchasing factors. But if you’re more interested in comparing features or you want to know to top players in the field, you can consult with our comprehensive top 20 payroll software solutions for 2025 guide.
Payroll administration is undeniably one of the most taxing of human resource management tasks. It takes up a lot of time and should be carried out efficiently as it is not a process that has anything to do with income generation. Being such, it is wise to make this process as time and cost efficient as possible. And payroll software is designed to do just that, allowing businesses to spend less time on payroll runs to focus on more pressing tasks. There are different ways by which companies can save money from using payroll solutions. These include key data verification, penalty avoidance and direct deposit use, among others.
To be more specific, payroll software automates, centralizes, and streamlines payroll processes. It automatically computes wages using a preset schedule which may come as weekly, fortnightly or monthly. Salary-related information such as salary grade, attendance, leaves and advances are likewise consolidated under such system. It also keeps track of corporate expenses, which include deductions, loans and advances. Payroll software can also assist in tax deductions, helping users with compliance.
As businesses have embraced the technology a long time ago, it is no surprise that the market for such platforms has consistently grown. In fact, the global cloud-based payroll software market alone is expected to expand by a CAGR of 12.09% from the year 2017 through 2021. Seen to fuel this growth is the upstick in the demand for integrated human capital platforms.
What are key considerations for payroll software integration?
When choosing payroll software, integrating it with your existing systems is essential to optimize workflow and minimize disruptions. Considering integration options can help streamline operations and ensure smooth data flow across departments.
- Compatibility with HR and Accounting Systems: Payroll software should seamlessly connect with other HR systems, like time-tracking tools and employee records, as well as accounting software. This integration ensures that data is synchronized and reduces errors related to duplicate entries or manual updates.
- APIs and Customization: Many payroll software solutions offer APIs to facilitate custom integrations with other business applications. Ensure that the payroll software has robust API support if your business requires specialized connections or data syncing between multiple platforms.
- Cloud vs. On-Premise Integration: Cloud-based payroll solutions are generally easier to integrate with other SaaS platforms, offering flexibility and remote accessibility. However, on-premise software may need specialized integration efforts and more extensive IT support to connect with other systems.
- Data Security and Compliance: Payroll data includes sensitive employee information, so any integrated systems must meet industry data security standards and compliance regulations, such as GDPR or SOC 2, to protect this information across platforms.
- Real-Time Data Updates: Integrating real-time data capabilities allows payroll to instantly reflect any changes in employee attendance, work hours, or benefits adjustments, leading to more accurate payroll calculations and reporting.
Types of Payroll Software Pricing Packages
The prices of payroll software may vary depending on factors such as vendor and business requirements. Here, we present a comparison of payroll software platforms and pricing plans of some of the most popular solutions currently in the market.
Free Applications
Free software comes in three distinct forms. Freeware is as the word implies, comes for free, allowing users to explore a solution’s features without paying a dime. There is also what is called freemium software, which is basically a watered down version of the real thing. If users opt to subscribe or purchase such solution, they will be required to pay for additional functionalities and integration options.
Free versions are ideal for startups and small businesses who lack the budget to invest in expensive platforms. There are tons of free payroll software for small businesses out there. But not all free software offer scalability so users may have to pay for full versions or find an alternative tool as their businesses grow.
Examples of Payroll Software With Free Plans:
Wave Apps
Free business solution Wave brings to the table a wide array of functionalities that include payroll, invoicing, accounting and receipt scanning in a single platform. It is highly-recommended for small businesses who have less than 10 workers and professionals who are self-employed such as freelancers, entrepreneurs and consultants. Setup is a breeze while the system’s ease-of-use allows users to immediately explore the software. The dashboard is easy to navigate, enabling businesses to quickly access needed features. Accounting functionalities are quite comprehensive as it can easily monitor expenses, track payments and manage payroll and taxes. This free tool also supports payment by direct deposit or credit card and a number of integrations.
Zenefits
Online HR management platform Zenefits is designed to help small and medium-size businesses handle payroll and other HR processes. It showcases features like employee directory, payroll management, business intelligence and insurance benefits management. The solution effectively combines all HR-related processes, all from a single online dashboard. This provides users with absolute control while giving staff more access to their HR records. Businesses are always updated with regards to deductions, earnings and employee taxes. Other key capabilities include hiring and onboarding, ACA compliance, PTO tracking, a mobile app, 401 (k), life and disability and COBRA,
Monthly Subscription
For businesses who want to subscribe to a platform but do not like the idea of entering into a long-term commitment, monthly subscription is the way to go. In such a pricing model, users get to enjoy all of a solution’s features and capabilities while paying only a minimal monthly fee. This is highly-suitable for small businesses whose budgets cannot meet pricey solutions. It is likewise ideal for those who are still in the process of growing and are still searching for the right payroll tool. The only setback to subscribing to such plans is that costs could run into the thousands in the long-run.
Examples of Payroll Software With Monthly Pricing Plans:
Gusto
A robust financial management solution that is capable of managing payroll, HR, benefits administration and compliance, Gusto is targeted at small businesses who are keen on providing all their employees’ HR needs. Thousands of businesses have been relying on the software’s powerful payroll features, simple user interface and automation functionalities. The product can automatically compute, pay and submit any business’ local, state and federal payroll taxes, allowing them to make payments by direct deposit and checks. If you want to try the features at no cost you can easily sign up for Gusto free trial here.
The software is available in three enterprise plans. The Core Plan, which comes as a full-service payroll, costs $39/month plus $6/month per person. The Complete Plan has all Core features, along with advanced HR tools and comes for $39/month and $12/month per person. Lastly, the Concierge Plan has everything in Complete and certified HR advisors. It comes for $149/month plus $12/month per persons.
Intuit Payroll
Popular payroll software Intuit is designed to cater to the needs of any business. The product comes in three packages, which allow for the efficient and accurate payment of staff. Tax computation is automated by the system, which is also capable of unlimited paycheck generation. The platform can seamlessly integrate with QuickBooks, giving it robust accounting capabilities. Business cash flow is improved with the app’s use as it ensures that workers are accurately compensated. Aside from being a payroll solution, Intuit Payroll can also help businesses manage talent recruitment and calculate employee taxes.
Intuit comes in a variety of pricing plans. The Basic Plan, which can instantly run payrolls and compute taxes comes for $20/month. An Enhanced Plan, which is sold for $31.20/month has all Basic features plus automatic tax form filling and electronic tax filing and payment. Its Full Service Plan has everything in Enhanced with the vendor setting up and running payrolls, data transfers and offering error-free guarantee. It is sold for 79.20/month. Lastly, Assisted Payroll for QuickBooks Desktop comes for $79.20/month. All plans entail a $2 fee per employee per month.
OnPay
OnPay is a complete payroll system that is ideal for SMBs who require scalability in any platform. It is deployed via cloud and can streamline processes that come with payroll preparation while automating the tax payment and filing process. Payroll data such as work hours, tips, reimbursements, bonuses and even compensation insurance and benefits for pay-as-you-go staff are automatically entered by the system. The app is so powerful that it can handle unlimited payroll runs for 1099 contract staff and W-2 employees. Users can likewise pay workers through either direct deposit or check. Want to try the features before committing to a plan? You can easily do so when you sign up for a OnPay free trial here.
OnPay has a transparent pricing plan. The vendor offers the software for free for the first month. Staff and salary data migration also comes for free. The online payroll comes for $36/month with each user charged with an additional $4/month. Requests for W-2 come for $5 each. Total monthly fee depends on the number of employees.
Per-User Pricing
Payroll products that are sold on a per-user basis are those that charge fees depending on the number of individuals who will use a platform. Such plans, most of the time, come complete with all the software’s features. The good thing about this pricing model is that companies can easily forecast their ROIs and revenues. However, it could also result in high costs for growing enterprises and those who have large number of employees.
Examples of Help Desk Platforms With Per-User Pricing Plans:
PayrollHero
Employee management solution PayrollHero is popular for its use of facial recognition technology in tracking employee attendance, seeing to it that the right employee is present at the right time, everytime. The software’s other key features include scheduling, time tracking and analytics, which are all managed from a singular console, doing away with manual reconciliation and preventing time-theft. Analytics and data aid facial recognition in ensuring accurate clocking. Time and attendance information are also collected from different locations. The system gives a variety of useful add-ons, which include highly-secure communication and access, backup recovery and unlimited storage.
PayrollHero’s pricing plans cater to both SMBs and large enterprises. Its Small Business plan comes for $3.5/user per month plus a $100 one-time implementation fee. This includes selfie clocks, Facebook selfies sharing, flex schedules, worksites, attendance reports, and iOS and Android apps. The Enterprise plan comes for $4.5/user per month and a $500 implementation fee. This feature includes all Small Business features and selfie verification, customizable scheduling, attendance resolution, email templates and notifications, analytics, smart counts, shifts, schedule templates, separation codes, time zone per employee, flag wall and leave applications. For those who prefer annual subscriptions, they are also available and come with a free-of-cost 13th month.
Quote-Based Pricing Plans
Despite being quite pricey, quote-based priced software is known to be very cost-efficient. This kind of payment model provides businesses with the option of optimizing their solution by letting them avail of the features they need, resulting in more cost-effective subscription. Vendors most of the time ask prospective users the features and functionalities they will need and their business’ type and size. This ensures that vendors charge subscribers only for the features that they require.
Examples of Software With Quote-Based Pricing Plan:
ADP Workforce Now
Web-based HR software ADP Workforce Now is specifically designed for small to midsize companies. The solution can collect and automate just about any HR process there is, all from a common dashboard. This results in staff being able to better coordinate and manage multiple HR tasks. Notable capabilities include payroll, benefits, time and attendance and holidays management. The app is also able to come up with reports from which insights may be generated for use in coming up with intelligent decisions. A benefit plan also comes with the system, which can be aligned to company policies and processes.
Dayforce HCM
Cloud-based HR management application Dayforce HCM offers businesses a plethora of functionalities that include payroll and tax, workforce, document, talent and HR management. Using the software, you get to access human capital management information in real time. This allows for the processing of payroll, benefits enrollment and compliance management, keeping of HR records and restoration of work-life balance by efficiently scheduling employees. The system consolidates all staff records with all HCM processes. In addition, Dayforce HCM also helps managers with onboarding and administering employee benefits. It is highly-flexible and can run on all known browsers.
One-Time Licensing Fee
Aside from subscriptions, payroll applications are also being marketed on a one-time licensing basis. This pricing model is usually applied to on-premise solutions and is ideal for those who have large budgets for software procurement. Albeit a bit expensive at a glance, this pricing plan is far cheaper in the long-run as users do not have to pay long-term for a single platform. The downside, however, is that users of such systems, most of the time, do not get to enjoy regular updates and technical support.
Example of Payroll Software With One-Time Licensing Fees:
CompensationXL
Compensation management platform CompensationXL is popular for both its flexibility and reasonable pricing. It is configurable and assists businesses in the automation of their processes without having to overhaul entire systems. It reduces cycle times of tasks such as incentive and merit increase management and total compensation statement creation. These cycles are not only accurate, they are also user-friendly and much faster. The platform is quite easy to use and does not require too much training. It can likewise perform tasks like equity awards, pay-for-performance and bonus allocation.
CompensationXL comes in two pricing models. The Team Edition starts at $5,000 per year and the Professional Edition at $10,000 per year.
Software Bundle
For businesses who require a payroll application and then some, software bundles are the perfect choice. Many such plans combine functionalities like accounting, HR and benefits management, among many others. Some, on the other hand, can integrate with other business tools to provide more benefits. This is a sound investment as these additional solutions can handle aspects of a business other than payroll processing.
Examples of Payroll Software That Come in Software Bundles:
Namely
A complete HR management suite, Namely has numerous capabilities that include payroll and talent and benefits management. It is deployed via cloud and can streamline paychecks computation and reflect benefits contributions and tax deductions. The product is quite popular, serving around 400 businesses, along with some 60,000 employees around the world. Key functionalities include time off tracking, team planning, staff performance review and reporting. The system is configurable to suit any business’ requirement and enables layered access levels so that users may view specific reports, information and functions.
The vendor does not publicly disclose its pricing plans. You may contact the company to request for pricing information and other platform details.
Xero
Xero is a financial management software that is targeted at businesses of all types and sizes. The tool makes the most complicated financial tasks as simple as can be. Notable functionalities include invoicing, bills payment, cash flow and expense claims management. Financial reporting, multi-currency, online payment, performance dashboard and sales tax computation are also supported. Xero has all the accounting and payroll features you’ll ever need. Proof of this is the fact that around half a million sole accountants and businesses have been using the platform.
The software is available in three pricing models. A Starter plan, which includes 5 invoices and quotes, 5 bills and 20 bank transactions comes for $9/month. Its Standard plan comes for $30/month and comes with invoices and quotes, bills, bank transactions and 5 payrolls. Lastly, the Premium plan comes for $70/month, featuring invoices and quotes, bills, bank transactions, 10 payrolls and multi-currency support.
Which pricing model to choose?
Regardless if you’re searching for a payroll software for the first time or just needs an upgrade of your existing system, choosing such solution need not be difficult. If you’re a small business, go for free platforms as they will give you what you need without hurting your budget. For growing businesses, scalability should be the focus. For these organizations, monthly subscription and per-user pricing are ideal as they can provide required features as the need arises. Finally for large enterprises, quote-based and software bundles are the pricing plans of choice as they come customized and have more features that big companies need.
Key Insights
- Variety of Pricing Models: Payroll software pricing varies widely, including free applications, monthly subscriptions, per-user pricing, quote-based plans, one-time licensing fees, and software bundles.
- Free Applications for Small Businesses: Freeware and freemium models are ideal for startups and small businesses with limited budgets, providing essential features with the option to upgrade for additional functionalities.
- Monthly Subscription Flexibility: This model is suitable for small to growing businesses, offering access to all features with a manageable monthly fee, but can become costly over time.
- Per-User Pricing: Charges based on the number of users, which can be predictable but potentially expensive for larger teams.
- Quote-Based Plans for Customization: Tailored solutions based on specific business needs, offering cost-efficiency but often at a higher initial price.
- One-Time Licensing for Long-Term Savings: Ideal for larger enterprises with significant upfront budgets, providing long-term cost benefits but lacking in regular updates and support.
- Comprehensive Software Bundles: Integrated solutions combining payroll with other functionalities like HR and accounting, beneficial for businesses needing multiple tools.
FAQ
1. What are the different pricing models for payroll software?
Payroll software can be priced using several models, including free applications, monthly subscriptions, per-user pricing, quote-based plans, one-time licensing fees, and software bundles. Each model offers different benefits depending on the size and needs of the business.
2. What is the advantage of using free payroll software?
Free payroll software is ideal for startups and small businesses with limited budgets. It allows users to access essential features without any cost. However, these free versions may lack scalability and advanced functionalities, requiring upgrades or alternative tools as the business grows.
3. How do monthly subscription plans work for payroll software?
Monthly subscription plans provide access to all features of the payroll software for a recurring monthly fee. This model is flexible and suitable for small to growing businesses. However, the costs can accumulate over time, especially as the business scales.
4. What is per-user pricing, and when is it beneficial?
Per-user pricing charges fees based on the number of individuals using the payroll software. This model can be beneficial for businesses looking to predict their costs and revenues easily. However, it can become expensive for larger teams or rapidly growing companies.
5. How do quote-based pricing plans work?
Quote-based pricing plans are customized according to the specific needs and size of the business. Vendors typically assess the required features and functionalities before providing a tailored quote. This model ensures businesses only pay for what they need, offering cost efficiency, but it can be more expensive initially.
6. What are the benefits of one-time licensing fees for payroll software?
One-time licensing fees involve a single upfront payment for the payroll software, making it cost-effective in the long run as there are no recurring payments. This model is typically applied to on-premise solutions and is ideal for businesses with large initial budgets. However, it may lack regular updates and ongoing support.
7. What is included in software bundles for payroll solutions?
Software bundles combine payroll functionalities with other tools like HR management, accounting, and benefits administration. These integrated solutions are ideal for businesses needing multiple tools to manage various aspects of their operations efficiently.
8. How should a business choose the right payroll software pricing model?
Choosing the right pricing model depends on the business’s size, budget, and growth plans. Small businesses might opt for free or monthly subscription plans, while growing businesses may prefer per-user pricing for scalability. Large enterprises might benefit from quote-based plans or software bundles for comprehensive and customized solutions.
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